Maritime Union of Australia, The v Patrick Stevedores Holdings Pty Ltd

[2014] FWC 5655

[2014] FWC 5655

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Maritime Union of Australia, The
v
Patrick Stevedores Holdings Pty Ltd
(C2013/6390)

COMMISSIONER CAMBRIDGE SYDNEY, 19 AUGUST 2014

Dispute settlement procedure - dispute as to entitlement to additional “scratch” days being days absent from work otherwise rostered - ambiguity arising from terms of industrial instrument - annualised work rostering arrangements - interpretation claimed to provide an entitlement to minimum number of “scratch” days - alternative interpretation involving operational requirement as a qualification to any entitlement to granting of a “scratch” day - overriding practical considerations support operational qualification - claim rejected.

[1] This matter involves an application made pursuant to section 739 of the Fair Work Act 2009 (the Act), for the Fair Work Commission (the Commission), to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP). The application was lodged at Sydney on 11 October 2013. The application was made by the Maritime Union of Australia (the MUA) and taken against Patricks Stevedoring Holdings Pty Ltd, which may be more accurately identified as Patrick Stevedores Holding Pty Ltd (the employer).

[2] The Commission is empowered to deal with the matter by virtue of a DSP found at Schedule 1 of the Patrick Terminals Enterprise Agreement 2012 (the Agreement). The question in dispute involves a claim by the MUA that the employer has refused to grant requests from employees for days of absence from work, which are known as “scratch” days, contrary to the provisions of sub-clause 10.10 of Part B: Schedule 4 of the Agreement.

[3] The matter was the subject of unsuccessful conciliation and the arbitration of the substantive matter in dispute has involved a Hearing conducted in Sydney on 3 and 4 June 2014. At the Hearing, Mr T Slevin, counsel, appeared for the MUA and called one witness who gave uncontested evidence on behalf of the MUA. The employer was represented by Ms R Bernasconi, counsel, who adduced evidence from two witnesses who were cross-examined by Mr Slevin.

Background

[4] On 15 June 2012, the Agreement was approved in a Decision of Sams DP [2012] FWAA 5021. This Decision noted, inter alia, that the Agreement represented the culmination of protracted and difficult negotiations.

[5] The Agreement is broadly divided into two Parts. Part A contains terms which have application across all four of the employer’s container terminals, and Part B, which includes Schedules 1, 2, 3 and 4, which each contain terms that have application to the specific terminals of Brisbane, Fremantle, Melbourne and Sydney respectively.

[6] Schedule 4 of Part B of the Agreement contains provisions which have specific application to the Sydney, Port Botany terminal. When the Agreement was made it introduced, for the first time, provisions within Schedule 4 of Part B which provide for the engagement of Permanent Irregular Roster employees (PIRs) at the Sydney terminal.

[7] The work of PIRs is arranged by way of 16 week roster cycles. Apart from two rostered off weeks (weeks 8 and 16) PIRs are notionally rostered to work on all remaining days of the roster cycle. PIRs are paid an annualised salary which is notionally based upon 1820 hours of work performed in a year, (35 hours per week over 52 weeks incorporating 5 weeks annual leave). If a PIR does not work a total of 1820 hours in a year no reduction of payment applies. If a PIR achieves 1820 hours before the end of the year, there is no further requirement to work further hours and if hours are worked in excess of 1820 then overtime rates are applicable.

[8] The Agreement introduced significant changes in respect to the rostered working arrangements that would apply to the newly created engagement of PIRs working at the Sydney terminal. Unsurprisingly, these changes did not occur without some difficulties and in September 2012, the MUA filed an application under s.739 of the Act for the Commission to deal with a dispute which was connected with the rostered working of PIRs. This s.739 application was the subject of proceedings before McKenna C. That matter was eventually discontinued following an exchange of correspondence between the Parties in May 2013.

[9] Unfortunately, some of the issues concerning the arrangements for rostering engagement of PIRs at the Sydney terminal continued to cause complaint from members of the MUA. Consequently, the present s.739 application has been advanced so as to have these issues the subject of an arbitrated determination.

[10] The particular issue of concern has focused upon the wording of sub-clause 10.10 of Schedule 4 of Part B of the Agreement which reads as follows:

“10.10. A PIR will be entitled to 10 full day scratchings booked no less than 24 hours

prior to normal allocation times every 16 weeks. A PIR who is in advance of

average annual hours will be able to scratch additional days. On the basis

that no more than 20% of al [sic] PIR's are unavailable at any one time.”

[11] An uncontested aspect of sub-clause 10.10 is that it operates to provide circumstances whereby a PIR who is notionally rostered to work on a given day, (all days other than those rostered off days in weeks 8 and 16) can apply to have that day “scratched” which means that he or she would not be required to work that day. Further, there was no issue that sub-clause 10.10 established the requirement that a PIR would need to request (or “book”) a “scratch” day no less than 24 hours prior to normal allocation time for the relevant shift.

[12] The dispute has concentrated upon the interpretation of the final sentence of sub-clause 10.10. The employer has relied upon the final sentence of sub-clause 10.10 to refuse requests for “scratch” days because of operational requirements notwithstanding that a PIC may not have been granted 10 scratch days during a particular 16 week roster period. The MUA has challenged this approach and asserted that PIRs are entitled to a minimum of 10 “scratch” days in each 16 week roster period irrespective of any operational requirement.

The MUA Case

[13] The submissions made by Mr Slevin on behalf of the MUA, urged the Commission to reject the manner in which the employer has interpreted and applied the terms of sub-clause 10.10. Mr Slevin said that there was no contest in the evidence which confirmed that nine PIR employees had not been granted their entitlement of 10 “scratch” days in each 16 week roster period.

[14] Mr Slevin submitted that the first sentence of sub-clause 10.10 established an entitlement to 10 “scratch” days in each 16 week period with the only proviso attached to that entitlement being that whereby a PIR must give no less than 24 hour notice of request for a “scratch” day. Mr Slevin said that any capacity for the employer to veto a “scratch” day request upon operational circumstances was limited to requests that were made under the second sentence of the sub-clause, which involved a PIR who was in advance of targeted annual hours, and was requesting a “scratch” day in addition to the 10 “scratch” days entitlement which was provided by the first sentence of the sub-clause.

[15] The submissions made by Mr Slevin also made further criticism of the procedure that the employer was adopting for approval or rejection of applications for “scratch” days made by PIR employees. Mr Slevin submitted that the employer was not using the 20% test contained in the final sentence of sub-clause 10.10, but instead it was using a different approach which involved a long-term assessment using a total workforce figure of 270. Mr Slevin said this approach did not comply with the terminology of sub-clause 10.10 as there was no mention in any of the employer's evidence of the use of the 20% calculation as the means by which the employer either approved or rejected any particular application for a “scratch” day.

[16] Mr Slevin made further submissions which emphasised that the approach to the correct interpretation of sub-clause 10.10 commenced with an examination of the text and a plain reading of the terms contained within the sub-clause. Mr Slevin submitted that the sub-clause established a beneficial provision involving an entitlement for a PIR employee to nominate 10 “scratch” days during each 16 week roster period. According to the submissions of Mr Slevin, so long as the notice requirements were given, the employer was required to grant the request for any of the “scratch” days up to the specified entitlement of 10 per 16 week roster period. Mr Slevin said that the employer simply did not have the right to refuse any request for a “scratch” day if such request met the notice requirements and was within the initial entitlement of 10 days.

[17] It was further submitted by Mr Slevin that the terms of sub-clause 10.10 only allowed the employer to reject a request for a “scratch” day because of operational requirements if the request involved a day in addition to the basic entitlement of 10 days. Mr Slevin acknowledged that this interpretation would be assisted if sub-clause 10.10 had been more grammatically correct and expressed with a comma between the second and third sentences rather than a full stop.

[18] Mr Slevin made further submissions which referred to the objects of the Act as contained in s.3 and in particular he referred to the National Employment Standards involving maximum weekly hours. In this regard, Mr Slevin submitted that if sub-clause 10.10 was not interpreted as providing for the minimum entitlement of 10 “scratch” days per 16 week roster period, there was prospect that the arrangements would represent the working of unreasonable additional hours. According to Mr Slevin, there was prospect that the arrangements used by the employer to reject applications for “scratch” days may contravene the provisions of ss.62 and 63 of the Act.

[19] In conclusion, the submissions made by Mr Slevin urged that the dispute be resolved by providing a determination which supported the construction and interpretation of sub-clause 10.10 of Schedule 4 of Part B of the Agreement as was asserted by the MUA.

The Employer’s Case

[20] The submissions made for the employer included an historical summary which traced the recent introduction of the PIR category of employees at the Sydney terminal and the extensive negotiations which culminated with the making of the Agreement.

[21] Ms Bernasconi who appeared for the employer, made submissions which referred to various authorities which she said established the correct approach to the examination and interpretation of the provisions of industrial instruments, such as sub-clause 10.10 of Schedule 4 of Part B of the Agreement. In this regard Ms Bernasconi referred to, inter alia, the Full Bench Decision in DP World v Maritime Union of Australia 1 and the Industrial Relations Court Decision in Kucks v CSR2.

[22] Ms Bernasconi submitted that the text of the particular sub-clause of the Agreement in question was undeniably ambiguous or unclear. Further, she submitted that the role of the Commission was to resolve a dispute as to which of the two competing interpretations of the sub-clause was correct. Ms Bernasconi also submitted that the Commission was confined to settling the dispute regarding the competing interpretations of sub-clause 10.10 and in doing so it should not apply some alternative interpretation that the Commission might be disposed to.

[23] Ms Bernasconi made further submissions which involved an analysis of the appropriate approach to interpretation which included an examination of the words contained within sub-clause 10.10 together with an analysis of the matters that were known to both Parties at the time of the making of the sub-clause. In addition, Ms Bernasconi acknowledged that it would not be appropriate to take into account the subjective intentions of the Parties but instead, having regard for the complete picture as would have been presented to the Parties at the time, establish objectively, what would logically have underpinned the terminology contained in sub-clause 10.10.

[24] Ms Bernasconi referred to evidence about the protracted and difficult negotiation process which preceded the making of the Agreement. Ms Bernasconi said that there was something like 19 drafts which were exchanged between the Parties during the enterprise bargaining process. Ms Bernasconi urged the Commission to accept that there was a clear intention contained in the terminology of sub-clause 10.10 for there to be some form of operational limitation upon which the employer could refuse to grant “scratch” days. Consequently, according to the submissions made by Ms Bernasconi, the Commission should reject the interpretation advanced by the MUA which, in effect, would remove the employer's capacity to have sufficient numbers of rostered employees to meet operational requirements.

[25] In addition, Ms Bernasconi submitted that it did not make any sense for the employer to have introduced a new rostering arrangement connected with the introduction of PIRs, which, in itself, had some substantial additional costs attached to it, without ensuring that it did not hand over an unconditional right for any number of employees to pick 10 “scratch” days on any day which they may have chosen. Ms Bernasconi acknowledged that the actual process by which the employer had exercised its capacity to veto “scratch” days on the basis of operational requirements, did not accord with the precise terms of the third sentence of sub-clause 10.10. However, she submitted that the underlying intention of sub-clause 10.10 was to provide for such a veto right for the employer.

[26] The employer submitted that the Commission should reject the interpretation of sub-clause 10.10 as advanced by the MUA. Ms Bernasconi submitted that such an interpretation would require the sub-clause to be read such that a comma rather than full stop existed at the end of the second sentence and this would be contrary to the plain construction of the sub-clause. Further, Ms Bernasconi submitted that the interpretation of the sub-clause as urged by the MUA, would be contrary to any realistic contemplation of the significant practical consequences for the employer's operation of such an interpretation.

Consideration

[27] The dispute in this matter has involved a contest about the meaning that should be given to particular words which appear in an industrial agreement. The approach to interpretation of industrial instruments is not a matter of strict statutory interpretation. Although the words in an industrial instrument may be given their plain literal meaning, it is well established that often it is appropriate to adopt a contextual and purposive approach broadly based upon authority established by a body of decision-making which is well summarised in a Decision of a Full Bench of Fair Work Australia in,Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Silcar Pty Ltd  3(Silcar).

[28] The interpretation of the terms of sub-clause 10.10 of Schedule 4 of Part B of the Agreement, as asserted on behalf of the MUA, manifests an obvious practical difficulty. Such an interpretation would provide a potential for significant numbers of PIR's to be absent on one particular “scratch” day and thereby cause severe disruption to the employer's operation. During the Hearing, a hypothetical example emerged which contemplated large numbers of PIRs all requesting to “scratch” the day after the final NRL State of Origin game and the employer would, on the construction advocated by the MUA, be unable to refuse such requests. It is frankly inconceivable that the first sentence of sub-clause 10.10 could be interpreted as essentially providing an unfettered right for any number of employees to be unavailable for what would otherwise have been a rostered engagement.

[29] A proper, careful interpretation of the sub-clause should recognise that the final four words contained in the third sentence, “... at any one time” have important work to do, particularly in the context of the two preceding sentences. The words, at any one time indicate that there would be a qualification for the granting of a “scratch” day connected with the practical requirements of the employer's business operation. In my view it is plainly illogical to suggest that the practical requirement regarding the employer's business operation would be confined only to scratch days that were in addition to the 10 days mentioned in the first sentence of the sub-clause.

[30] Consequently, the Commission must reject the interpretation of sub-clause 10.10 of Schedule 4 of Part B of the Agreement as advocated by the MUA.

[31] The changed rostering arrangements which accompanied the introduction of the PIR engagement would, realistically, be likely to experience some difficulties. In the first year of operation of the PIR's, the employer believed that employees received payment for something in the order of 2,500 hours, for which no work was actually performed. 4 Conversely, a number of employees have raised complaint about being refused “scratch” days. It is evident that both Parties may benefit from some adjustment and refinement of the rostering arrangements which apply for PIR's.

[32] During the Hearing the Commission suggested that as an alternative to the arbitrated determination of the competing interpretations advanced in respect of sub-clause 10.10, an agreement which involved converting four of the nominated 10 scratch days into designated days off might represent a more practical outcome. The Commission advanced this alternative proposition as a potential to provide greater certainty for employees seeking to enhance their work/life balance whilst ensuring that the practical operational requirements for the employer's business are protected. Regrettably, it appears that the Parties have been unable to reach agreement on the proposition advanced by the Commission or develop some agreed permutation of that proposition.

Conclusion

[33] The determination of this dispute has involved the interpretation of particular words in sub-clause 10.10 of Schedule 4 of Part B of the Agreement. The words contained in sub-clause 10.10 should not be interpreted superficially or too broadly. The words contained in sub-clause 10.10 must be interpreted having regard for the logical, practical implications which follow from the competing interpretations urged by the respective Parties.

[34] My consideration leads me to conclude that sub-clause 10.10 does not provide an entitlement for PIR's to be granted a minimum of 10 “scratch” days in each 16 week roster period, qualified only by the minimum notification requirements. Rather, the third sentence of sub-clause 10.10 provides for the granting of any “scratch” days to be subject to the reasonable operational requirements of the employer's business. These requirements have been identified as circumstances where, if, at any one time, more than 20% of the total number of PIRs would be unavailable for duty, the employer may refuse applications for “scratch” days.

[35] The current practice of the employer does not appear to identify the 20% of total number of PIRs being unavailable as the operative basis for any refusal to grant a “scratch” day. That particular measure is stipulated in the Agreement. Therefore, it would be appropriate for the employer to change the practice for determination of any refusal of “scratch” days so that the stipulated percentage measure of 20% of total number of PIRs was established as the basis for any refusal to grant a “scratch” day.

[36] In summary, the Commission rejects the interpretation of sub-clause 10.10 of Schedule 4 of Part B of the Agreement as advanced by the MUA. However, the employer will need to change its practice for refusal of “scratch” days in order to comply with the qualification for such refusal as stipulated in the Agreement.

[37] The application is determined accordingly and the proceedings are concluded.

COMMISSIONER

Appearances:

Mr T Slevin, counsel, for the applicant;

Ms R Bernasconi, counsel, instructed by solicitors from Seyfarth Shaw, for the respondent.

Hearing details:

2014.

Sydney:

June, 3 and 4.

 1   DP World Brisbane v Maritime Union of Australia [2013] FWCFB 8557.

 2 Kucks v CSR Limited [1996] IRCA 166 (19 April 1996), 66IR182.

 3   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Silcar Pty Ltd [2011] FWAFB2555.

 4   Transcript of proceedings @ PN539.

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